PETALING JAYA: The producer price index (PPI) for local production in November 2021 increased 12.6%, compared with a 3% decline a year earlier, mainly driven by the surging cost of raw materials.
In a statement, the Statistics Department said this marked the eighth consecutive month that the inflation from the producer’s perspective registered a double-digit increase this year.
Chief Statistician Datuk Seri Mohd Uzir Mahidin (pic) said the increase in the PPI of local production in November was due to the mining index that surged 71.2%, compared with a 45.8% drop a year earlier.
“The rise in the price of crude oil (79.8%) and natural gas (38.2%) contributed to this increase. The agriculture, forestry and fishing index also increased, but at a slower rate of 19.1% (November 2020: 21.5%), largely due to the increase in the indices of oil palm fresh fruit bunches (25.2%), chicken (18.1%) and hen’s eggs (8.3%),” he said.
Also, the manufacturing index rose 8.4% in November contributed by the indices for the subsectors of the manufacture of refined petroleum products (26.2%) and the manufacture of vegetable and animal oils and fats (21.9%).
The water supply index increased marginally by 0.2%, while the electricity and gas supply index declined by 0.3%.
On a month-on-month comparison, Mohd Uzir said the PPI local production rose 1.4% due to a 5.9% rise in agriculture, forestry and fishing index, mainly contributed by the indices of growing of perennial crops (8.3%), growing of non-perennial crops (3.0%) and animal production (1.2%).
The index of oil palm fresh fruit bunches remained virtually unchanged over concerns of insufficient migrant labour in Malaysia’s plantations.
“On the other hand, the price of crude oil slumped due to a discovery of the new Covid-19 Omicron variant which was first detected in South Africa that led to fears of its spread, hence slowing demand for the commodity. This contributed to a 2.3% drop in the mining index (compared with a 5.5% increase in October),” he said.
Regarding the PPI local production by stage of processing, Mohd Uzir said the index of crude materials for further processing rose 33.4% (compared with a 12.3% decrease a year earlier), led by higher prices of crude oil and oil palm fresh fruit bunches.
The indices for vegetables, namely, tomatoes, round cabbage, egg-plants and Chinese mustard, also increased.
Similarly, the intermediate materials, supplies and components index also climbed 12.1% (compared with a 1% decline a year earlier).
Among the products that contributed to the increase in this index were liquefied natural gas, crude palm oil, palm olein, integrated circuits, aluminium, rubber, mild steel round bar and mixed poultry feed.
However, the index of finished goods saw a 0.1% fall due to a drop in the indices of personal computers and rubber gloves (examination).
As for skyrocketing commodity prices, Mohd Uzir said, “In cognisance of the cold weather, strong winds coupled with heavy rain in most places in Malaysia became one of the factors in the rising cost of commodities, especially vegetables.
“An insufficient number of workers in plantation areas also reduced the amount of output, hence, resulting in disruptions in supply and leading to an increase in prices.
“Recently, heavy downpours caused massive flooding in several states. The floods destroyed most of the crops, and thus, may result in supply chain disruptions, which lead to a tendency of price pressures.”